The HCES data also showed that the difference in average monthly consumption expenditure between rural and urban households narrowed further to 69.7 per cent in 2023-24 from 71.2 per cent in 2022-23, and 83.9 per cent 11 years ago in 2011-12, which implies that rural consumption spending continued to rise more than urban consumption spending over the last one year.

“The urban-rural gap in MPCE has declined to 71 per cent in 2022-23 from 84 per cent in 2011-12. It has further come down to 70 per cent in 2023-24 that confirms sustained momentum of consumption growth in rural areas,” the Ministry said in a statement.

Rural average monthly consumption spending per person increased to Rs 4,122 in 2023-24, an increase of 9.3 per cent from Rs 3,773 in 2022-23. It had stood at Rs 1,430 in 2011-12. This increase in rural spending over the one-year period was higher than the urban average monthly consumption expenditure per person at Rs 6,996 which increased from Rs 6,459 in 2022-23. The urban average monthly consumption expenditure per person had stood at Rs 2,630 per person in 2011-12. This seems to suggest that the pace of spending is more in rural India compared with the urban population, which seems to be cutting down on its consumption.

A closer look at the fractile data reveals that the top 5 per cent of the rural and urban population saw a decrease in consumption spending in 2023-24, even as all other segments of the population, including the bottom 5 per cent, registered an increase in spending.

Experts pointed out that this is in contrast to evidence from other datasets that show a rise in spending by top segment, especially on premium goods. “Every fractile class has shown an increase in consumption except the top fractiles which is opposite to the trend being seen in other datasets,” an economist, who did not wish to be named, said.

Former Chief Statistician of India Pronab Sen said the deviant trend in the top fractiles may be a result of the change in methodology. “The household consumption surveys were earlier done once every five years but after the change in methodology, the back-to-back surveys were conducted to see if the revised methodology is stable. The change in methodology needs to be validated, otherwise it may show results which are not explainable,” he said.

“It’s also possible that while conducting the survey, the respondent is not the same during subsequent visits and it is no longer the same category of the people from whom you were getting responses,” he told The Indian Express.

The monthly per capita expenditure (MPCE) of the top 5 per cent of the rural and urban population stood at Rs 10,137 and Rs 20,310, respectively, in 2023-24 lower than Rs 10,501 and Rs 20,824 in 2022-23. The MPCE of bottom 5 per cent for rural and urban population increased to Rs 1,677 and Rs 2,376, respectively, in 2023-24 from Rs 1,373 and Rs 2,001 in 2022-23.

In fact, the increase in average monthly per person spending in percentage terms was the highest in 2023-24 for bottom 20 per cent in rural and urban areas at Rs 6,276 (19.2 per cent increase from 2022-23) and Rs 9,156 (18 per cent increase), respectively. Top 20 per cent saw an increase in monthly spending of just 1.5 per cent to Rs 22,829 for rural areas and 1.1 per cent rise to Rs 43,266 for urban areas.

Including the imputed values of items received free of cost through various social welfare programmes, the average monthly consumption expenditure per person was Rs 4,247 and Rs 7,078, respectively, for rural and urban areas as against Rs 3,860 and Rs 6,521 in 2022-23. The fact sheet did not give fractile data for imputed consumption as was released in the earlier round. Officials said details will be given in the full report that is slated to be released early next year.

The Survey report, however, pointed out that consumption inequality, both in rural and urban areas, has declined compared with 2022-23. The Gini coefficient declined to 0.237 in 2023-24 from 0.266 in 2022-23 for rural areas and to 0.284 in 2023-24 from 0.314 in 2022-23 for urban areas.

Among food items, the share of cereals went up to 4.99 per cent in 2023-24 from 4.91 per cent in 2022-23 for rural households, while that for urban households went up to 3.76 per cent from 3.64 per cent. The share of egg fish and meat in total MPCE inched higher to 4.92 per cent and 3.56 per cent in rural and urban areas, respectively, in 2023-24 from 4.91 per cent and 3.57 per cent. Beverages, refreshments and processed food continued to have the highest share of expenditure in 2023-24 at 9.84 per cent and 11.09 per cent in the consumption basket of rural and urban households, respectively, compared with 9.62 per cent and 10.64 per cent in 2022-23.

The share of expenditure on non-food items stood at 52.96 per cent and 60.32 per cent in rural and urban households, respectively, in 2023-24 as against 53.62 per cent and 60.83 per cent in 2022-23. Consumption expenditure on non-food items in rural India was driven by conveyance, medical expenses, clothing, bedding and footwear. In urban India, the spending on non-food items was mainly on account of conveyance, miscellaneous goods and entertainment, durable goods and rent.

State-wise data also showed a divergent trend between consumption patterns of high spending by western and northern states and lower spending by eastern and central states of India. For instance, the average spending per person was lower than the national average in rural and urban areas of West Bengal, Bihar, Assam, Odisha, Uttar Pradesh, Madhya Pradesh, Jharkhand, Chhattisgarh in 2023-24. States of Maharashtra, Punjab, Tamil Nadu, Telangana, Kerala, Karnataka, Haryana, Gujarat, Andhra Pradesh showed per capita spending higher than the national average. Rajasthan stood out as it showed consumption spending lower than national average for urban areas but a higher-than-national average spending for rural areas.

All-India consumption trend

Source: NSO, MoSPI